Payday lenders say they're just providing a service, but critics say the costs are so astronomical, no wonder they're illegal in some states.

Americans will spend more than 7.4 billion dollars on payday loans this year.

Much, if not most, of the costs actually double the loan amount.

"If you borrow 400 dollars on a pay day loan, you may carry that loan for five months and end up paying a total of 900 dollars in principal and fees," said Nick Bourke of Pew Charitable Trust.

Bourke helped research payday loans.

In-depth interviews with more than 700 payday borrowers were conducted.

"7 out of 10 pay day loan borrowers are turning to pay day loans for regular living expenses, like rent and utilities," said Bourke.

And thus starts the vicious cycle that includes compounding of finance charges that translate into yearly interest rates of 2, 3, or four hundred percent.

"If the borrower cannot repay on the next pay day, then they'll usually go in and renew the loan, or they'll pay it off and re-borrow it a few days later when they need their rent or some other bill," Bourke said.

Payday loans are under increased scrutiny, but as long as they're legal, financial advisers say borrowers should consider other options.

"Things like getting help from family or friends, selling or pawning possessions, or of course tightening their budgets," Bourke suggested.

Pew's research shows 19-million Americans will use payday loans this year, even though it's "highly unrealistic for borrowers to think they will repay the loan on their next payday."